What’s rights got to do with it? The increasing relevance of statutory charters of rights for business

Australia is currently the only OECD country without a national charter or bill of human rights, but recent developments raise questions as to whether that’s about to change.

In August 2023, at the Australian Labor Party (ALP) National Conference, the ALP committed to considering a statutory charter of human rights for Australia. This follows the Australian Human Rights Commission (AHRC) Position Paper released in March 2023, which outlines a proposal for a Commonwealth Human Rights Act (AHRC Proposal). Also in March, the Parliamentary Joint Committee on Human Rights began its Inquiry into Australia’s Human Rights Framework – including whether the current Commonwealth framework is fit for purpose or could be strengthened by the introduction of a human rights charter. These developments follow the enactment of statutory charters of rights in the ACT (2004), Victoria (2006) and Queensland (2019).

The likelihood of enhanced human rights protection through statutory charters of rights in the remaining states and territories, and federally, is increasing. These statutory charters of rights do not just impact public entities, they are also increasingly relevant to how business is conducted in Australia.

Below, we explore the impact statutory charters of rights have had in states and territories where they have been adopted, consider the possible impacts of a Commonwealth charter on Australian businesses, and outline how to prepare your business.

How Australian statutory charters of rights work

Similarly to the charters of rights enforced in New Zealand, the UK and Canada, the three existing Australian charters of rights and the AHRC Proposal all follow what is known as a ‘new Commonwealth model’ of rights charters.

There are four central features to new Commonwealth model rights charters:

1. A codified charter of rights (as distinct from the piecemeal rights protection which exists in Australia’s Constitution).
   
   
2. Rights review of new legislation prior to its enactment (generally through statements of compatibility from executive government and review by parliamentary committees).
   
   
3. Some form of judicial review of legislation and administrative decisions for compatibility with rights. This generally takes the form of the courts applying rights consistent interpretations to legislation (where possible) and having the power to invalidate administrative decisions that are not compatible with rights.
   
   
4. Parliament has the final say on the enforceability of statutes (i.e. the judiciary cannot invalidate statutes). This is in contrast to the Bill of Rights in the United States which gives the US Supreme Court the power to strike down laws that infringe on protected rights.

The impact of charters of rights on business

Australia has a highly regulated economy and businesses rely on administrative decisions of governments in order to carry out much of their activity, whether that be through the grant of statutory licences, project approvals, permits and, in some cases, tenure.

The introduction of a statutory charter of human rights means that:

• when considering whether to grant these licences, approvals, permits or tenure, the decision-maker, acting as a public entity, must give proper consideration to the impact on human rights; and
  
  
• the decision must be compatible with human rights.

Giving proper consideration to human rights means that the decision-maker must:

• identify which rights may be affected by the decision;
  
  
• identify and seriously consider the impacts of the decision on those rights; and
  
  
• balance the countervailing interests of rights impacts and other benefits of the decision.

This requires the decision-maker to be fully informed of the impacts and benefits of a particular decision. If a decision-maker is not fully informed, this may mean that proper consideration was not given to human rights, which may give rise to a challenge to that decision. The determination of whether a decision is compatible with human rights will generally be the result of a balancing exercise to decide whether the benefits of the proposal are proportionate to and justify the potential limitations or impacts on human rights.

If a decision is incompatible with rights or the decision-making process did not adequately consider rights, a decision may be susceptible to being invalidated through a challenge in the courts. The existing Australian rights charters contain what is known as a ‘piggy-back’ clause which means that in order to bring a claim for breach of human rights, the claimant must have an otherwise valid cause of action. Therefore, while a human rights act in and of itself may not increase litigation, we expect that an increased number of cases will contain human rights causes of action, particularly given the broader standing afforded to individuals and groups in human rights cases.

This is not just theory. We have seen a steady increase of challenges to decisions of government in the states and territories in which these statutory charters of rights operate.

The energy and resources sector has been significantly impacted by statutory charters of rights. In Queensland, the Land Court recommended that the grant of an environmental authority to Waratah Coal (Waratah) not be approved on the basis that the new coal mine would not be compatible with human rights. This decision demonstrated the impact that the Human Rights Act 2019 (QLD) can have on project approvals in Queensland. The Waratah case highlighted the Land Court’s obligation to consider compatibility with human rights in its recommendations, including its recommendations on mining leases and environmental authorities.

It is not only prior to licences being approved that challenges are being mounted. The Environmental Defenders Office has launched a challenge to Blue Energy’s gas field. The basis of the challenge is that by contributing to worsening climate change, Blue Energy infringes a number of rights under Queensland’s Human Rights Act, including the right to life, the protection of children and the right to culture.

We have seen similar challenges on human rights grounds in New South Wales with Gloucester Resources Limited v Minister for Planning, and in respect of Commonwealth approvals processes with Santos v Tipakalippa, even though there is no human rights instrument in New South Wales or at the Commonwealth level.

Challenges to proposed property developments on human rights grounds have also arisen. There have been a number of examples in Victoria where third parties have included compliance with the Charter of Human Rights and Responsibilities Act 2006 (Vic) in their grounds for opposing a particular property development. Some of those human rights grounds have been considered by various Victorian Courts and Tribunals and there are two interesting aspects of these decisions:

1. Confirmation that individual planning permits and decisions made by local government must be compatible with human rights and that this must be assessed on a case-by-case basis. While cases have indicated that a development which was consistent with the relevant planning scheme would be likely to be consistent with human rights without further need for enquiry, there have been instances where the particular human rights impacts have been found to be a matter for more detailed consideration, as part of the merits hearing of the relevant permit application. This confirmation of the role of human rights in individual permit decisions increases pressure on businesses to ensure they understand and are able to mitigate any negative impacts on human rights, to allow decision-makers to make rights-compliant decisions and decrease the likelihood that issued permits will be challenged.
   
   
2. Acceptance by the courts that the decisions of governments relating to large infrastructure projects can be subject to a valid claim of a breach of human rights, particularly where rights relating to cultural heritage are involved. This may be, for example, as a consequence of the development of road projects, transmission lines or other large infrastructure projects impacting land and traditional land use rights.

Possible Impacts of a Commonwealth Charter

If a Commonwealth Charter is implemented, the current AHRC Proposal proposes to adopt the same model as is currently in force in the ACT, Victoria and Queensland. We therefore expect that similar claims would be likely to be brought where a Commonwealth decision-maker is involved. This would be significant given the breadth of decisions entrusted to Commonwealth decision makers, including decisions relating to environmental approvals, cultural heritage, certain resource allocation, infrastructure projects and even procurement and tendering.

We have already seen human rights concerns being ventilated in Commonwealth approvals processes through other means (including the attempted invocation of negligence in Sharma). Accordingly, we expect that litigants would not hesitate to bring such rights-based claims promptly following the introduction of a Commonwealth Human Rights Act, on the basis that a decision of a regulator did not adequately consider or was not compatible with human rights.

How to prepare your business

The adoption of a Commonwealth Charter would bring increased scrutiny on the potential impact of business on human rights. If successful, we expect that administrative decisions, particularly those which may have impacts on the environment or First Nations peoples, would be susceptible to challenges from concerned litigants. This could have operational, reputational, and financial consequences for the business seeking approval. It is therefore crucial that businesses:

• develop strong human rights due diligence frameworks and include human rights impact assessments in their risk assessments, environmental assessments and in the development of business activities requiring administrative approval;
  
  
• in relation to projects, engage with impacted rights holders early in the process in order to identify and address any concerns and issues that arise;
  
  
• minimise project impacts by ensuring early consideration of human rights, including free, prior and informed consent (FPIC) and environmental (including climate and biodiversity) risks; and
  
  
• seek to mitigate impacts on rights to ensure that any impacts and benefits of the project are proportionate.

In the past, human rights risks and impacts have been considered as non-financial risks to business. However, there is now little question that many human rights risks ultimately also present material risks to business with both commercial and financial implications. Organisations that do not understand or ignore the need for strong human rights management do so at their peril.